Correlation Between Ingen Technologies and Align Technology
Can any of the company-specific risk be diversified away by investing in both Ingen Technologies and Align Technology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ingen Technologies and Align Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingen Technologies and Align Technology, you can compare the effects of market volatilities on Ingen Technologies and Align Technology and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ingen Technologies with a short position of Align Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingen Technologies and Align Technology.
Diversification Opportunities for Ingen Technologies and Align Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ingen and Align is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ingen Technologies and Align Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Align Technology and Ingen Technologies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ingen Technologies are associated (or correlated) with Align Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Align Technology has no effect on the direction of Ingen Technologies i.e., Ingen Technologies and Align Technology go up and down completely randomly.
Pair Corralation between Ingen Technologies and Align Technology
If you would invest 27,161 in Align Technology on January 20, 2024 and sell it today you would earn a total of 2,973 from holding Align Technology or generate 10.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Ingen Technologies vs. Align Technology
Performance |
| Timeline |
| Ingen Technologies |
| Align Technology |
Ingen Technologies and Align Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingen Technologies and Align Technology
The main advantage of trading using opposite Ingen Technologies and Align Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingen Technologies position performs unexpectedly, Align Technology can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Align Technology will offset losses from the drop in Align Technology's long position.The idea behind Ingen Technologies and Align Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Align Technology vs. Agilent Technologies | Align Technology vs. Illumina | Align Technology vs. Waters | Align Technology vs. Thermo Fisher Scientific |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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